Payson Barely Stays On Budget

Year-end budget and sales tax figures suggest the town eked through the year — and perhaps has gotten through the worst

Advertisement

A million-dollar loan from the water department enabled Payson to eke through the fiscal year that ended in June, according to just-released figures that remain preliminary.

Preliminary sales tax figures suggest the region is holding its own when it comes to retail sales.

Even more encouraging, building permits have begun to trickle into the planning department again, after several months in which the town did not issue any permits at all.

Payson Mayor Kenny Evans said town officials currently have 17 commercial projects in the early stages of the development pipeline — in addition to the four commercial building permits issued in July and August.

All told, the figures suggest that Payson narrowly avoided going broke in the just-ended fiscal year and has the first glimmers of hope for a turnaround in the upcoming fiscal year.

And that’s good, since the town has already relaxed its most serious budget cutting measures, which included a hiring freeze, four-day-a-week operation of town hall, furloughs that cut town salaries by 12 percent to 16 percent and a near ban on overtime.

Payson is banking on a rise in revenues in the current fiscal year to not only pay those higher costs, but begin paying back the $1 million borrowed from the water department.

Payson has gone three months without issuing a formal financial report, which mostly reflected the state’s fiscal year end delays in reporting tax revenue data.

Two years ago as town revenues dwindled, the lack of monthly financial reports promoted the council to spend all the town’s reserves before council members even realized what was happening. That forced the town into layoffs and the cancellation of a score of capital improvements as the recession deepened.

Preliminary figures

The preliminary figures obtained this week by the Roundup still require confirmation from the increasingly chaotic state accounting system, but the available numbers suggest the town ended the year within $13,000 of its projections — a remarkable feat in a $26 million budget.

However, the year-end uncertainty was compounded by some disarray in the town’s own finance department. The town went through two finance managers this year, both let go at the end of their three-month probationary period.

Reportedly, the second chief financial officer had been making the books balance in part by adding “minute entries” to the ledger, which essentially made note of a discrepancy without tracking down the source.

Payson is currently advertising for yet another finance manager.

Overall, the town spent nearly $850,000 more than it took in, which means it had to precariously balance its books with a $1 million loan from the water department.

The preliminary figures showed the town spent $26.6 million in fiscal 2009-10 — or about $1,700 for each resident. However, the town collected only $25.8 million in taxes, grants and fees.

The closely watched sales tax figures held more or less steady in May and June. All told, the town collected $6.9 million in sales taxes for the year — about $550,000 less than expected.

The decline in sales tax revenue accounted for the bulk of the losses for the year, although income taxes, property taxes and vehicle license fees also brought in a little less than the council assumed when it adopted the budget.

Fortunately, the town squeezed down its spending almost as fast as revenues declined. Almost every department spent less than its budget in the course of the fiscal year.

Town officials emphasized the preliminary nature of the figures, since the state lags months behind in turning over tax money at the end of the fiscal year.

For instance, for July the town received just $123,000 in sales tax money from the state. Last year, the comparable figure was $23,000 — even though when the smoke cleared a month or two later the town ended up collecting $700,000 in sales taxes for July.

As another example, town officials were alarmed back in April when sales tax receipts dropped off a cliff — the biggest decline in a year. Budget officials feared the figures showed the region had toppled back into recession.

However, the state later admitted that the miscoding of receipts had mistakenly shifted tax receipts from April into other months.

The town should get a better sense of where it stands in about two weeks, when the state reports figures for August.

Mayor Evans said the region seems to be holding its own in the preliminary June and July sales figures.

“We’re not thriving,” he said, “but we’re certainly surviving. It seems like we’re moving in the right direction.”

The June sales numbers showed modest declines from last year’s already weak totals. Sales tax revenue totaled $5.9 million for the month, a decline of 12 percent from last year.

For once, declines in construction didn’t lead the way — with receipts in that crucial sector down by about half the overall rate of decline.

The broad category of retail trade accounted for the bulk of sales — and the bulk of the decline at 15 percent. Retail sales totaled $3.2 million — about 54 percent of the total.

The accommodations sector also took a hit, with a 17 percent decline to $222,000, based on the still preliminary figures. The town’s battered economy once relied heavily on real estate sales, new construction and second-home buyers. The housing crash smothered the construction sector, forced down home prices and left the region with a roughly two-year supply of unsold homes.

That left the one-legged tourism sector to keep the regional economy hopping along. However, the drop in accommodations indicates that despite a summer schedule full of special events, the town struggled to fill its hotel rooms.

Still, the figures so far suggest that the town got through the year by the outermost layers of the skin of its teeth.

However, the town now enters yet another year without any cushion worth mentioning, rising expenses, deferred maintenance of its deteriorating streets, a fire station under construction with no money to pay firefighters to staff it — and only tantalizing signs that the worst downturn in sales and construction in a generation may have ended.

Comments

Dan Varnes 3 years, 7 months ago

QUOTE: "...and only tantalizing signs that the worst downturn in sales and construction in a generation may have ended."

Those "signs?" They're FALSE.

This new millennium depression will roll on unabated, no matter how much politicians try to play the "extend and pretend" game.

0

Dan Varnes 3 years, 7 months ago

That seems to be the conventional wisdom, doesn't it?

I'd love to see it come to a vote, but I don't think they'd give us the chance to interfere with their "vision."

The future of education is ON-LINE, at your home and not inside huge, expensive buildings.

0

Requires free registration

Posting comments requires a free account and verification.